Should we be on high alert for significant fluctuations in the pound following the release of the UK Consumer Price Index?

Should we be on high alert for significant fluctuations in the pound following the release of the UK Consumer Price Index?

18.10.2023

In the U.S. currency market yesterday, the U.S. dollar fell against the euro after the release of U.S. September retail sales data showed a 0.6% month-over-month increase in core sales.The EUR/USD pair rose from 1.0533 to 1.0594. It broke above the 4-hour 20-MA with a bullish candle and also broke through the 4-hour 75-MA. Due to yesterday’s rise, the EUR/USD has recovered to just below the daily 20-MA. However, since the downtrend that has persisted since July of this year remains intact, caution is advised regarding the direction of the market.

Ahead of today’s UK CPI release, the pound traded in a narrow range against the yen. The GBP/JPY pair rose from 181.055 to 182.799, breaking out of the range where it had been trading below the 20-day moving average on the daily chart. On the weekly chart, the 20-day moving average is acting as support, and the pair has rebounded with a bullish candle featuring a lower wick. We will be closely watching today’s CPI release to see how it affects expectations for interest rate hikes.

Today, at 3:00 PM: UK Consumer Price Index (CPI) and Retail Price Index (RPI); at 5:00 PM: South Africa CPI; at 6:00 PM: Eurozone CPI; at 8:00 PM: South Africa Retail Sales; at 8:00 PM: US MBA Mortgage Applications Index; at 9:00 PM: Brazil Retail Sales;at 9:30 PM: US Housing Starts and US Building Permits; at 9:30 PM: Canadian Wholesale Sales and Canadian Manufacturing Sales; at 9:30 PM: the NY Fed Manufacturing Index; at 12:30 AM: the US 6-month Treasury bill auction; at 1:00 AM: remarks by Fed Governor Waller; and at 3:00 AM: the US Beige Book.With the release of the UK Consumer Price Index, I want to carefully assess whether the pound will see significant volatility and determine the direction of the market.

Past Market Reports

1. 21.04.2026New

   With the euro-Australian dollar pair hitting new lows this month, attention is turning to how much further it might fall

2. 20.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

3. 17.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

4. 16.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

5. 15.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

6. 14.04.2026

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

7. 13.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

8. 10.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

9. 09.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

10. 08.04.2026

    Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran